The US will go over the fiscal cliff

Go to page

Well-known member

I think it might be inevitable at this point.
I've felt all along the Democrats should just go over the cliff (allow all tax decreases to expire for all income levels) and then just force the Republicans to vote for tax decreases for those under 250K in the New Year. The Republicans are going to come out of this looking even worse than they do currently.

The House Republicans seem bent on playing cards they don't really have. Now Boehner can't get any GOP support for even small tax increases. If it is 2-4 years of this .. America will wisen up and get rid of the House Republicans - giving the Democrats control of everything.
Should be interesting. Obama better not cave. He should realize he has every reason not to.

Well-known member

Well-known member

Mr. Obama wants to raise taxes by about $20-billion a year more than Mr. Boehner.​

​

That’s real money by most measures. Yet such numbers are barely noticeable compared to the $2.6-trillion the government is projected to collect next year, and to the $3.6-trillion it’s expected to spend.​

​

Despite their differences, the numbers being proposed by Mr. Obama and Mr. Boehner are so close, and the political risks both men have taken on taxes and Social Security benefits are so stark, that many consider it almost unthinkable that they would not eventually complete a deal. [source]​

Arguing over 20 billion seems like small potatoes when you are a trillion in the hole for next year's budget.
Is that correct ?
Ouch.

Well-known member

I'm using the words fiscal cliff to mean letting the tax cuts expire on Jan 1, 2013.
I agree the US balance sheet is probably beyond repair.
The US defaulted after world war 1, maybe it has to happen again.
It'll certainly make US worker's salaries more competitive.

Well-known member

Raise taxes, lower taxes... none of that really matters. What really needs to happen is the federal debt ceiling needs to just be frozen. The mentality of our government of bringing in $500 billion more in revenue... in their mind, that means they have $800 billion more to spend.

Rather than borrow now and figure out how to pay it back someday in the future, a freeze on the debt ceiling means you need to figure out where the revenue is coming from before you borrow.

Of course the other problem is people have grown accustomed to the government taking care of them so citizens will just vote for whoever isn't going to take away their entitlements.

I honestly don't mind if they raise taxes as long as that would be used to pay down debt... but I'm fairly certain they will figure out something to spend any extra revenue on, so it's kind of a lost cause unfortunately.

Now if all US taxpayers, would just kick in their fair share of $1,061,218... we could be out of debt finally. http://www.usdebtclock.org/

Well-known member

We see the same thing happening in the Netherlands, Shawn. The government decides it's time to freeze the debt ceiling, and do so by raising taxes, rather than shrinking the government itself.

The Dutch government is a gigantic bureaucratic machine that poisoned the public school system and the health care system by introducing layers of middle management, all making the life of the people with their feet in the mud more difficult, and obviously, the people running the show are incompetent party-sheiks, who get paid huge salaries for their mis-management.

The government expects people to balance their books better by not spending more than they earn, but they themselves are exempt from that expectation. It's time for a new revolution, or firing each and every politician (with the possible exception of Ron Paul, maybe).

XenForo moderator

Trust me, when the cuts come you'll know about it. The UK deficit reduction plan has reduced our annual deficit by 1/4 and the machine is already starting to groan. The problem is, as it currently stands there is no growth occuring on a large scale, so effectively its double dipping as the reduction plan was largely reliant on a solid level of economic growth to offset the pain of the cuts.

Unforutnately this means the average voting idiot in the UK will switch their vote back to the heavy spending labour party and push us right back into the bad situation we were in before any of the cuts were made.

Well-known member

Unforutnately this means the average voting idiot in the UK will switch their vote back to the heavy spending labour party and push us right back into the bad situation we were in before any of the cuts were made.

Political Science is my undergraduate major. I'll never forget what one of my favorite professors said in regard to the voting public (in both a Politics & Media class and Elections class), "The average member of the voting public is politically inept. They rely on spin doctors and political parties to craft their political perceptions."

Well as I said, we are only 1/4 of the way out of the UK yearly deficit, and the whole government is aching over the cuts. I would say we need to get to do that again, and then focus on a sound growth plan to make up the other half by moving the debt from public sector to private sector once again.

All of this is probbaly at least 5 years+ from happening if it happens at all, and if a spendy spendy government like labour gets back in, then push that back 10 more years.

Well-known member

Well as I said, we are only 1/4 of the way out of the UK yearly deficit, and the whole government is aching over the cuts. I would say we need to get to do that again, and then focus on a sound growth plan to make up the other half by moving the debt from public sector to private sector once again.

All of this is probbaly at least 5 years+ from happening if it happens at all, and if a spendy spendy government like labour gets back in, then push that back 10 more years.

Active member

You guys are talking about the credit rating? Read from a 14 Sept Reuters article that it was already downgraded from AA to AA- (now I know there's an AA-). Suppose this time it will be A, since the first downgrade went from AAA to AA.

Edit: The AA- rating given by the American credit rating agency, Egan-Jones.